German industry perks up

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Good news from Germany today: German confidence regarding industry and trade rose unexpectedly, after six months of souring sentiment. Business people surveyed in the Ifo Business Climate Index were far less pessimistic about their future business prospects, supporting a view that the German economy is holding up relatively well during the euro zone crisis.

In manufacturing, the business climate index rose slightly following a six-month decline, with companies reporting greater satisfaction with their current business situation. Meanwhile, for the first time in three months, companies were positive about future exports.

Wholesalers surveyed reported a dramatic improvement in business, while retailers said the future looked brighter—a situation hoped for by retailers everywhere as the official holiday shopping season has begun. German construction companies also reported big improvements to their current situation and said they were confident about the future.

Other numbers released today from the Federal Statistics Office showed that German economic growth slowed to 0.2% in the third quarter from 0.3% in the second, in line with preliminary estimates released earlier. The main drivers were exports, household spending, and construction.